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Wednesday, February 3, 2010

MIDF Amanah upbeat on residential property market

The residential property market is expected to thrive this year as it rides on the surge in demand, particularly in the medium-high segment, says MIDF Amanah Investment Bank Bhd.

It said although new property launches in key cities like Kuala Lumpur, Johor Baru and Penang are less encouraging, the expected stronger economy this year should see the launch of previously delayed projects.

"Our survey with key developers shows that purchasing interest remained high with take-up rates of new projects at an average of 70 per cent just from private previews or first few days of the launch," MIDF Amanah said in its research note.

Despite signs of sectoral revival, it said the property sector still lacks foreign participation to drive its marketability.
More measures are needed to secure foreign participation, apart from the present tax incentives and MSC-status benefits.

The investment bank maintained its "neutral" call on the property sector as it expects property sales to undergo a minor correction when Bank Negara Malaysia begins to tighten monetary policy and foreign funds start withdrawing should the economic recovery lose its momentum.

"However, we believe local investors will cushion the downside as property buyers will seize any buying opportunity. We continue to favour counters with exposure to the mid- to -high-end residential market and industrial developments," it said.

MIDF Amanah said medium- and high-end properties benefit from an economic recovery as consumer purchasing power increases and participation in the small- and medium-scale property sector also increases from business expansion.

The residential sector remains a favourite for hedging purposes, it added.

By Bernama

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